News Briefs

Sep 29, 2003

Feds eye Qwest debarment

Yet another telecommunications company is at risk of being barred from new federal contracts.

Qwest Communications International Inc. confirmed late last week that the inspector general of the General Services Administration has asked GSA's suspension and debarment official to consider debarring the company.

GSA's concern centers on eight former Qwest employees involved in two 2001 transactions. One involved the Arizona School Facilities Board and the other a company called Genuity Inc. The case led to indictments against the workers and a civil complaint from the Securities and Exchange Commission.

"We took very aggressive action. Every bad actor is out of the company," said James Payne, senior vice president of Qwest's Government Systems Division. Seven of the people have left the company and one is on administrative leave, he said.

Payne characterized the IG's recommendation as a routine step.

The action comes at a time when GSA has recommended that MCI also be barred from federal contracts and is also looking into complaints about Sprint.

Companies that are debarred may not take new contracts for federal business, although they may carry out work on existing contracts until those deals expire.

A GSA spokeswoman said the MCI matter is still under review. She declined to comment on Sprint and Qwest.

Itronix bought out of trouble

Itronix Corp., which makes rugged mobile computers, will be sold in a bid to get the unit away from its financially troubled parent company.

Financial firm Golden Gate Capital agreed to buy the Itronix unit of Acterna LLC for $40 million. The transaction is expected to close early next month.

The move will reposition Itronix as a strong and independent company, said Tom Turner, Itronix president and chief executive officer. "We will be financially independent."

Schlumberger Ltd. has renamed its smart card division in an effort to give it its own brand identity.

Although the unit, newly named Axalto, remains part of Schlumberger, company officials say it could be sold off or go public in the near future.

Schlumberger as a whole is focusing more on its core energy industry customers, said Paul Beverly, president of Axalto's Americas division. The company has established a significant presence in the federal market for smart cards, including being one of the first two companies to provide cards for the Defense Department's Common Access Card program.

The division's new name is derived from access, which smart cards control, and altitude, which "symbolizes our strategic vision and high expectations for smart cards," Beverly said.

"We felt that it was important that we establish our own identity, which reflects our smart card strategy," he said. Schlumberger has a "tremendous amount of goodwill associated with the brand, but it doesn't [reflect] the benefits of smart cards. Axalto is meant to do that."

The momentum around smart cards has been strong now for five years and especially in the past two years, Beverly said. It is being driven by DOD's proactive approach to the Common Access Card.

Schlumberger recently sold its SchlumbergerSema division, including its four-person federal government subsidiary, to Atos Origin, based in Paris. n